Kraft Launches Line Extension For MiO

From its March 2011 introduction, Kraft MiO has expanded beyond the traditional sweetener of adding flavors to plain water.  They bulked up the product line-up in 2012 with MiO Energy,  characterized by two new flavors (Green Thunder and Black Cherry) containing 60mg of caffeine per serving.  At the end of 2012, Kraft MiO revealed that they will be announcing something to supplement their product line-up of liquid flavor enhancers.  Turns out that announcement was for Kraft’s MiO Fit,  a line extension with electrolytes and B vitamins, and 18 servings in each bottle.  The MiO Fit will come in two flavors: Berry Blast and Arctic Grape.

When the MiO Energy launched, it extended the product line-up into the energy drinks spectrum to compete against Red Bull, Monster Energy and the likes.  With the MiO Fit, Kraft is serving notice to that they will be going up against Gatorade and Powerade in the sports drinks beverage segment.  How will the MiO Fit do relative to its direct and indirect competition?  Will its success come at the expense of other MiO products, competitive beverages, or from consumers that do not typically drink these types of beverages?

For the MiO Fit to succeed in the sports drink segment, another beverage manufacturer will be losing, though not necessarily in the same segment.  The MiO Fit does not grow the beverage industry, rather it transfers a shopper’s purchase dollars from another segment and/or another beverage manufacturer.  Beverages as a category include soft drinks, sports drinks, energy drinks, juices and so much more.  Therefore, people that end up buying the MiO Fit could be purchasing it instead of another sports drink, energy drink, or some other liquid refreshment.  The only beverage segment that wins will be bottled water, since the MiO Fit must be squeezed into water to take full effect.

In the short term, this certainly will lend extra attention to the sport drinks beverage segment.  There may be more discount activity or media promotions from Gatorade and Powerade to deter consumers from buying the MiO Fit.  Kraft will also be putting media support behind the MiO Fit to ensure consumers know there is a legitimate third sports drink option out there on the market.  For example, Kraft has invested significant funding to feature the MiO during this year’s Superbowl (read more here).  This has all the signs that some level of price or promotional activity may occur very soon to fight for your attention and your wallet dollars.  Certainly the winners here will be the consumers that drink sports drinks.

It is also important to note that the MiO Fit gives sports drinks another location in the grocery store to connect with consumers.  In addition to being stocked in the beverage aisles like Gatorade and Powerade, the MiO may be a product that can make it to the checkout counter.  With its small size and no need to be kept cold, it can very well make it closer to the last point of purchase and gain some impulse purchase dollars.  Meanwhile, the closest Gatorade or Powerade will get is the end of the checkout line beside candy, gum, and magazines since it has a dedicated cooler space.

Kraft’s deeper drive into beverages has certainly added many options to the marketplace.  Consumers that find plain water boring can now squeeze in some flavoring.  And when they find this flavoring boring, they can change it up for some MiO Energy or MiO Fit.  It’s very clear Kraft MiO is still very new to the market, and that there are many more extension opportunities.  They have not even expanded to offer their existing flavors in larger or smaller serving sizes.  And there are still other beverage segments where a MiO may change the landscape (ie tea or juices). So while Kraft introduced the MiO in 2011, there has already been extensions in 2012 and 2013.  Let’s keep an eye on what they may do during the year, and what they plan on launching come 2014.

Will You Sing For a Free Coke?

We’ve seen YouTube videos of Coca-Cola offering you a free coke by doing different things like hugging and dancing with the vending machine in the past.  Most recently we’ve even seen a video where thirsty consumers are told to accept a James Bond-like mission to get a free bottle of pop.  Now they have asked you to sing for a free Coca-Cola.  See the video below where students in Sweden sing karaoke to a Coca-Cola vending machine during the holidays.

The question is, why is Coca-Cola offering so many drinks for free?  What do they get out of giving away so many bottles of Coca-Cola?  Aside from the free media and overall feel-good behavior that these activities generate, it falls right in line with their tagline “Open Happiness”.  Notice that all these events take place in a collectivistic setting where many people gather together (school, train station, mall), so it can bring enjoyment to everyone.  The fact that these activities are recorded allows for online sharing indicate that it can bring even more joy for those that cannot immediately participate.  These vending machine videos entrenches the message that every time you are consuming a Coca-Cola beverage, you are feeling gratification.  It is also accepted by society since everyone else is smiling and feeling the same way you are.

What is also curious to note is that all these initiatives originated in Europe and Asia.  Will these media-generating activities happen in Canada and the United States?  From a business standpoint, maybe in the United States more than in Canada.  Vending machines typically don’t offer a strong investment return unless it is in a high traffic area and Canada does not have too many high traffic locations.  Consider this similar to the Coca-Cola Freestyle machine, where they are more easily found in the U.S. than here.  These units must be placed in high traffic and high visibility locations in order to generate enough sales and/or media buzz.  And culture-wise, North American culture celebrates individualism more than collectivism.  That also play a role in determining whether these types of activities are imported.  While hugging, dancing, or singing are not culture-specific, the setting in which these activities take place are.  Singing and dancing in public are much less common here than in Europe.  People may also be less likely to do these things in public for fear of embarrassment.

This means that though the message of “Open Happiness” stays the same in North America as in Europe or Asia, the communication to deliver this message is different everywhere.  In the meantime, we can always look forward to these types of social engagement activities on the web.

7-Eleven and Red Bull’s Christmas Partnership

Earlier in 2012, Red Bull revealed that they would be launching three new energy drink flavors in March 2013: Cranberry, Lime and Blueberry (BevW’ire’s analysis on why these new flavors will be successful can be found here).  While those attending the NACS show in October were able to sample the  new flavors during the announcement, others have not been so lucky and would have to wait until March.  Fortunately, 7-Eleven and the energy drink manufacturer partnered to participate in an exclusive holiday program where the three new flavors (named the “Editions”) would be available nationwide in the U.S. convenience chain during Christmas.  Will this action set a precedent  where Red Bull launches their beverages in certain retailers exclusively for a short time period before releasing it to all grocery, convenience and merchandising retailers?

Based on 7-Eleven’s execution to support this exclusive arrangement  it looks like the collaborative effort has been beneficial for both partners.  7-Eleven not only provided the typical cooler barrel, cooler clings, shelf danglers, but also supported the launch with outdoor banners, social media activity, and free coffee promo offers.  With the strong support levels 7-Eleven provided, it would not be surprising to see Red Bull take part in exclusive arrangements again with 7-Eleven.  After all, 7-Eleven is the largest U.S. distributor for the energy drink, and the caffeinated beverage is one of the retailer’s top moving products.  This arrangement may not happen as easily with other retailers, since they would not have the same reach despite it being a fast moving product.  However, the answer may ultimately depend on whether both parties can benefit from this exclusive arrangement, and whether the energy drink was supported to the same extent.  It may stand a stronger chance being a convenience or petroleum-bar retailer than grocery customers since beverages are a larger part of their daily business.

Can this type of exclusive partnership happen in Canada?  While exclusive beverages are not uncommon, the number of retailers in Canada are much smaller than in the U.S.  The American retail system is much more fragmented than the Canadian retail landscape.  This means that foregoing business with one retailer would be more detrimental to the manufacturer in Canada than in the U.S.

As retailers and manufacturers continue to partner up in efforts to attract consumers to their locations, the probability of finding products offered exclusively can be quite high in the U.S., but not just yet in Canada.  Of course, if the same level of support was provided, there can be exceptions in the U.S. as well as Canada.

Thanks For Visiting BevWire Nearly 110,000 times in 2012

Well another year has passed and I always start of the year by revealing some of the stats that WordPress has tracked for BevWire.  It has been an amazing year and I’d like to share that with you.  In addition to managing BevWire on WordPress, I have also started a column with the Canadian Grocer.  While my posts focus on consumers as well as my many random thoughts, the Canadian Grocer pieces are geared more towards retailers and what they may benefit from dedicating more attention to their beverage aisle.  Feel free to go over there and take a look! Thanks for reading everyone, and I hope you continue reading!

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The WordPress.com stats helper monkeys prepared a 2012 annual report for this blog.

Here’s an excerpt:

19,000 people fit into the new Barclays Center to see Jay-Z perform. This blog was viewed about 110,000 times in 2012. If it were a concert at the Barclays Center, it would take about 6 sold-out performances for that many people to see it.

Click here to see the complete report.

Dr Pepper Highlights Individuality in “/1” Campaign

Starting today, Dr Pepper will be launching an extension to their previous T-shirt “I’m a Pepper” campaign.  The new campaign titled “/1” highlights the character’s uniqueness and that they are indeed one of a kind – 1/1 – truly unrivaled in what they do.  Dr Pepper’s advertising agency conducted research to ensure that those numbers represented in the video are statistically accurate, and that these people are peerless in what they do (how many models-turned-boxers do you really know out there?).  Dr Pepper says that the characters featured are real-life people and while they may not be world famous, these individuals are renowned within their respective fields (boxing, roller derby, and air guitar).

It’s worthy to note that this campaign extends to focus on Diet Dr Pepper as well.  Traditionally their commercials and features have been separate, but they have chosen to include Diet Dr Pepper as well in this campaign.  Dr Pepper TEN likely was left off because the messaging of “Not For Women” is on solid footing right now.  As seen from the commercial below, Dr Pepper wants to highlight your individuality in choosing not just Dr Pepper, but also Diet Dr Pepper

So would you rate these commercials as successful?  Do they get your attention? Does it make you pick up a Dr Pepper when you are at the supermarket or convenience store, especially when Coke or Pepsi also also available for your purchase?

I think it does…with some caveats.  While the messaging is solid and connects with the viewer, it still has a strong chance to get lost among all the other commercials that are playing.  Not to mention that Coca-Cola and Pepsi have more money to spend on advertising;  the chances of you being bombarded with soda commercials are quite high and remembering Dr Pepper over a longer time period are quite low.

Dr Pepper’s series of commercial stands apart from how other soda companies have advertised their trademark beverages.  Coca-Cola talks about happiness when you drink their carbonated soft drinks (Open Happiness) and Pepsi advertises on living in the moment (Live For Now).  Dr Pepper turns the focus to you, on how you are special and different from everyone else out there.  In today’s society, everyone wants to be known for being themselves, so Dr Pepper has tapped into how individuals want to think which makes it easier for them to identify themselves with Dr Pepper.  In my opinion, this is a stronger message than being happy or living in the moment.

Still, it is a matter of whether this will translate to any form of wins for Dr Pepper.  Are consumers more likely to buy more Dr Pepper because of this commercial?  Will these purchases come at the expense of Coke, Pepsi, or some other non-Dr Pepper-owned beverage brand?  Keep in mind that Dr Pepper also has to compete with other beverage products, like Red Bull, Gatorade, Nestle Water and the like.  At the supermarket or convenience store’s point of purchase, some of these products will undoubtedly be on sale and make that decision to choose Dr Pepper even harder.  It may come down to whether you are willing to pay more to be unique.

So the next time you are purchasing a soft drink – any drink actually – will you choose Dr Pepper because it reminds you of your individuality?